Kaymu Nepal Private Limited, a company established with foreign investment amounting to Rs 20 million, is allowed to engage only in software and website development, but it has been operating as an online marketplace and providing the services of a trade agent.
Department of Industry (DoI) on August 1, 2014 allowed the company to bring in investment worth Rs 20 million, with a capacity for 300 software and 800 website developments annually. But the company´s website says kaymu.com.np is an online shopping site. According to DoI´s website, the company has a commitment to provide jobs for 30 people. The company was established by BAMBINO 50 VV UG & CO, a German-based e-commerce company with a network extending to 32 countries.
The company has been operating as a trade agent connecting buyers and sellers through its online platform. According to the Industrial Enterprise Act, trading is not categorized as an industry, while according to the Foreign Investment and Technology Transfer Act, foreign investment is only permitted in industries. Therefore, the business of connecting buyers and sellers as a sales agent is not what foreign investors are permitted to do.
An official at DoI said that kaymu.com.np is operating as a trade agent, which is illegal. Its involvement in the trading business has also raised eyebrows at the Federation of Nepalese Chambers of Commerce and Industry. An FNCCI executive requesting not to be named asked why government authorities allowed them to operate as a trading agent, in contravention of the norms of bringing in foreign investment. “Foreign investment is only allowed in sectors which can create jobs and contribute to the national economy,” added the source.
Asked about the trading operations other than what was allowed by DoI, Director General of DoI Maheshwor Neupane said foreigners are not allowed to trade and they will take stock to see if the company in question has been operating for different purposes.
Sources also disclosed that the company´s officials had in the beginning approached DoI for running an online trading business but they were turned down. Later, they chose to register as a software and website development company, to secure permission. It is also learned that DoI has written a special condition into the permission letter issued to the company, stating that it is not allowed to engage in any online marketing and network business. The company has been promoting various goods such as gadgets, clothing items and furniture among others, and running an aggressive marketing campaign through Nepal-specific Google advertisements.
An excerpt of the company´s website reads, “With Kaymu, online shopping in Nepal is secure. Kaymu.com.np makes sure that it has the best deals and promotions lined up for you so you can shop to your heart´s content without any worry. Be it a t-shirt or a watch, shop knowing that kaymu.com.np gives you the best prices available.” According to its website, Kaymu´s online e-commerce business was launched in December 2012 by Africa Internet Group, an e-commerce pioneer in Africa, and it is backed by Millicom, MTN, RI and Ooredoo. The company has spread to over 32 countries across Africa, Asia and Europe, with new countries being launched every month.
Country Director of Kaymu Nepal Private Limited, Rajiv Amatya, denied working as a trade agent. The company´s lawyer, Anjan Neupane, said over the phone, “Nepal´s law allows any business related to computer software.” He further said, “Kamyu is not itself involved in trading and it only places information on the goods of others and promotes the trading of such goods through its website.”